Reports from Arkansas-based trucking companies and numbers from two closely watched national freight reports paint the picture of a national economy that is soft and uncertain.

The Cass Freight Index reported a 5.6% increase in shipments in February, which helped counter a January decrease of 4.8%. The February increase also ended four consecutive months of Index declines.

“February’s sharp increase is partially due to the strong showing for rail over the last four weeks – carloadings are up 3.7% and intermodal units are up 6.9% over the preceding four weeks,” the Cass report noted.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the Index. The data comes from a Cass client base of 350 large shippers.

The American Trucking Associations’ February Truck Tonnage Index rose 0.6%, down slightly from a revised 1% gain in February. Counter to the Cass Index, the February ATA report marked four straight months of increases – a streak not seen since late 2011.

Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., provides economic analysis for the Cass Freight Index. She said a reason for variations between the ATA and Cass reports is that Cass measures transaction data and ATA measures tonnage.

“The most likely reason for the difference in the last few months is that the average weight of a shipment rose during the period,” Wilson noted.

TONNAGE GAINS Year-to-date, compared with the same period in 2012, the ATA tonnage index is up 4.4%. In 2012, tonnage increased 2.3% from 2011.

“Fitting with several other key economic indicators, truck tonnage is up earlier than we anticipated this year,” ATA Chief Economist Bob Costello said in a statement. “While I think this is a good sign for the industry and the economy, I’m still concerned that freight tonnage will slow in the months ahead as the federal government sequester continues and households finish spending their tax returns. A little longer term, I think the economy and the industry are poised for a more robust recovery.”

Trucking serves as a barometer of the U.S. economy, representing 70% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9.2 billion tons of freight in 2011. Motor carriers collected $603.9 billion, or 80.9% of total revenue earned by all transport modes.

SOFT COMPARISONS David Humphrey, vice president of investor relations and corporate communications for Fort Smith-based Arkansas Best Corp., said tonnage is improving in the first quarter of 2013, but the comparisons are up against a weak freight environment in early 2012. The company’s 10-K, filed Feb. 28, noted a 6%-7% increase in tonnage for the first few weeks of the quarter compared to the same period in 2012.

“When considering the 1Q’13-T-D total tonnage increase it is important to remember that in the first quarter of 2012 (the period we are now comparing back to) ABF’s total tonnage per day declined 10.6% versus the first quarter of 2011,” Humphrey explained.

ABF Freight System, one of the nation’s largest less-than-truckload carriers, is the principal subsidiary of Arkansas Best Corp.

“We have experienced an increase in miles (year over year), but we attribute that to internal improvements (such as seating more trucks with drivers). Overall, the freight market is soft for this time of year,” Beckham said.

ECONOMIC POSITIVES, NEGATIVES The soft market, according to Wilson, also limits how much shippers can charge for increases in tonnage.

“Freight expenditures rose 1.8% in February, but still remain 1% below the same period last year. The weak performance of the economy has prevented carriers from implementing large rate increases. Most of February’s growth in expenditures can be attributed to the heavier loads and fuel surcharges,” Wilson explained.

Wilson provided the following positives and negatives facing shippers for the remainder of 2013. Positives • Sales of new and existing homes picked up last month, and more importantly, building permits – an indicator of future construction – hit their highest level in four years.

• Automobile and small truck sales have been strong for three months running.

• The Institute for Supply Management’s PMI for manufacturing activity accelerated at the fastest pace in two years.

• Consumer sentiment is up despite hits to household income.

Negatives • The potential impact of the Sequester and resulting government spending cuts and personnel furloughs.

• The hike in payroll taxes.

• Weak retail sales and high fuel prices.

• Continued global economic decline.

• Weak job growth and high unemployment.

“March should continue to look much the same as January and February for the freight transportation sector. The impact of government spending cuts will not hit all at once and will have long‐term effects on the economy, but it is difficult to gauge them now,” Wilson said in her analysis.